Taxation with Representation. “ The income tax law is a lot of bunk. The government can’t...
-
Upload
jocelin-martin -
Category
Documents
-
view
217 -
download
0
Transcript of Taxation with Representation. “ The income tax law is a lot of bunk. The government can’t...
![Page 1: Taxation with Representation. “ The income tax law is a lot of bunk. The government can’t collect legal taxes from illegal money. ” - Al Capone.](https://reader035.fdocuments.in/reader035/viewer/2022062409/56649e545503460f94b4b07c/html5/thumbnails/1.jpg)
Taxation with Representation
![Page 2: Taxation with Representation. “ The income tax law is a lot of bunk. The government can’t collect legal taxes from illegal money. ” - Al Capone.](https://reader035.fdocuments.in/reader035/viewer/2022062409/56649e545503460f94b4b07c/html5/thumbnails/2.jpg)
“The income tax law is a lot of bunk.
The government can’t collect legal taxes from illegal
money.”
- Al Capone
![Page 3: Taxation with Representation. “ The income tax law is a lot of bunk. The government can’t collect legal taxes from illegal money. ” - Al Capone.](https://reader035.fdocuments.in/reader035/viewer/2022062409/56649e545503460f94b4b07c/html5/thumbnails/3.jpg)
Taxes Fund Public Goods
![Page 4: Taxation with Representation. “ The income tax law is a lot of bunk. The government can’t collect legal taxes from illegal money. ” - Al Capone.](https://reader035.fdocuments.in/reader035/viewer/2022062409/56649e545503460f94b4b07c/html5/thumbnails/4.jpg)
Early Taxes
• Cooking Oil, Foreigners, Slaves (Ancient Egypt)
• Sales, Inheritance, Imports, Exports (Ancient Rome)
• Beards Beehives, Boots, Souls (Russia, 1702)
• Bachelors (England, 1695: Missouri, 1820)
![Page 5: Taxation with Representation. “ The income tax law is a lot of bunk. The government can’t collect legal taxes from illegal money. ” - Al Capone.](https://reader035.fdocuments.in/reader035/viewer/2022062409/56649e545503460f94b4b07c/html5/thumbnails/5.jpg)
The Power to Collect Taxes
• American Revolution cased debt.
• Tax was necessary to pay debt.
• Article 1, Section 8 of the U.S. Constitution granted Congress power to tax.
![Page 6: Taxation with Representation. “ The income tax law is a lot of bunk. The government can’t collect legal taxes from illegal money. ” - Al Capone.](https://reader035.fdocuments.in/reader035/viewer/2022062409/56649e545503460f94b4b07c/html5/thumbnails/6.jpg)
Three Tax Structures
1. Progressive – A larger % of income is taken in taxes as income increases.– Current income tax structure
Annual Salary Tax Rate
Ima Broke 9K. 15%Jane Doe 100K. 25%Sean Senn 400K. 33%Seth Levi 4 M. 39.6%
![Page 7: Taxation with Representation. “ The income tax law is a lot of bunk. The government can’t collect legal taxes from illegal money. ” - Al Capone.](https://reader035.fdocuments.in/reader035/viewer/2022062409/56649e545503460f94b4b07c/html5/thumbnails/7.jpg)
![Page 8: Taxation with Representation. “ The income tax law is a lot of bunk. The government can’t collect legal taxes from illegal money. ” - Al Capone.](https://reader035.fdocuments.in/reader035/viewer/2022062409/56649e545503460f94b4b07c/html5/thumbnails/8.jpg)
Three Tax Structures
2. Regressive Tax – • A smaller % of income is taken as income
increases.• Sales Tax
– Item taxed at flat rate regardlessof income.
Example:8 % sales tax on new $50,000 car = $4,000
Average U.S. Income – $50,500Chris Hemsworth – $50,000,000
![Page 9: Taxation with Representation. “ The income tax law is a lot of bunk. The government can’t collect legal taxes from illegal money. ” - Al Capone.](https://reader035.fdocuments.in/reader035/viewer/2022062409/56649e545503460f94b4b07c/html5/thumbnails/9.jpg)
Three Tax Structures3. Proportional - “Flat tax”
• Same percent paid in taxes regardless of income level.
Annual Salary Tax Rate
Ms. Duke 250K. 28%Honey Boo Boo 1 M. 28%Robert Downey Jr. 5 M. 28%
![Page 10: Taxation with Representation. “ The income tax law is a lot of bunk. The government can’t collect legal taxes from illegal money. ” - Al Capone.](https://reader035.fdocuments.in/reader035/viewer/2022062409/56649e545503460f94b4b07c/html5/thumbnails/10.jpg)
Personal Opinion?
Which tax structure do you think is most equitable and why?
Proportional
Progressive
![Page 11: Taxation with Representation. “ The income tax law is a lot of bunk. The government can’t collect legal taxes from illegal money. ” - Al Capone.](https://reader035.fdocuments.in/reader035/viewer/2022062409/56649e545503460f94b4b07c/html5/thumbnails/11.jpg)
Four Tax Bases1. Individual Income Tax -
16th Amendment (1913)• State• Federal
-FICA • Social Security• Medicare
(payroll tax= 12%)6%
employee6%
employer
![Page 12: Taxation with Representation. “ The income tax law is a lot of bunk. The government can’t collect legal taxes from illegal money. ” - Al Capone.](https://reader035.fdocuments.in/reader035/viewer/2022062409/56649e545503460f94b4b07c/html5/thumbnails/12.jpg)
Four Tax Bases
2. Sales Tax -% tax on purchase of goodsVaries by county
In the Sales and Use Tax Law, the sale or use of certain tangible personal property is exempt from both sales and use tax. Examples include cold food products and prescription medicines.
Sin Tax - Tax used to deter what is considered to be a legal but negative behavior.
Examples:• Alcohol• Cigarettes
![Page 13: Taxation with Representation. “ The income tax law is a lot of bunk. The government can’t collect legal taxes from illegal money. ” - Al Capone.](https://reader035.fdocuments.in/reader035/viewer/2022062409/56649e545503460f94b4b07c/html5/thumbnails/13.jpg)
Four Tax Bases
3. Property Tax - • % on each
property owner• Paid annually• Varies by city
![Page 14: Taxation with Representation. “ The income tax law is a lot of bunk. The government can’t collect legal taxes from illegal money. ” - Al Capone.](https://reader035.fdocuments.in/reader035/viewer/2022062409/56649e545503460f94b4b07c/html5/thumbnails/14.jpg)
Four Tax Bases
4. Corporate Income Tax - • Corporations, like
individuals, pay income tax on their earnings
• State• Federal
![Page 15: Taxation with Representation. “ The income tax law is a lot of bunk. The government can’t collect legal taxes from illegal money. ” - Al Capone.](https://reader035.fdocuments.in/reader035/viewer/2022062409/56649e545503460f94b4b07c/html5/thumbnails/15.jpg)
Where Does it Go?
![Page 16: Taxation with Representation. “ The income tax law is a lot of bunk. The government can’t collect legal taxes from illegal money. ” - Al Capone.](https://reader035.fdocuments.in/reader035/viewer/2022062409/56649e545503460f94b4b07c/html5/thumbnails/16.jpg)
Ability to Pay Theory
Each person is responsible for filing a tax return.
![Page 17: Taxation with Representation. “ The income tax law is a lot of bunk. The government can’t collect legal taxes from illegal money. ” - Al Capone.](https://reader035.fdocuments.in/reader035/viewer/2022062409/56649e545503460f94b4b07c/html5/thumbnails/17.jpg)
Benefits Received Theory
• Those who directly benefit from the services provided by the taxation should pay the tax.
Example:Gas tax = Revenue goes directly to roads and auto related issues.
![Page 18: Taxation with Representation. “ The income tax law is a lot of bunk. The government can’t collect legal taxes from illegal money. ” - Al Capone.](https://reader035.fdocuments.in/reader035/viewer/2022062409/56649e545503460f94b4b07c/html5/thumbnails/18.jpg)
Tax Evasion vs Tax Avoidance
• Tax Evasion – Failure to pay legal taxes due.
• Tax Avoidance – Legal means of decreasing your tax bill.
1. Exemptions: Fixed amount you can subtract.1. Child tax credit2. Charitable donation
2. Deductions: Variable amounts subtracted from income.
1. Mortgage interest2. Tax sheltered investments
![Page 19: Taxation with Representation. “ The income tax law is a lot of bunk. The government can’t collect legal taxes from illegal money. ” - Al Capone.](https://reader035.fdocuments.in/reader035/viewer/2022062409/56649e545503460f94b4b07c/html5/thumbnails/19.jpg)
Other taxes……
1. Estate Tax - Placed on estates over $3,500,000 (45%)
2. Gift Tax - can give $13,000 per year tax free.
3. Import Tariff
4. Excise Tax - Tax on certain products and activities.
![Page 20: Taxation with Representation. “ The income tax law is a lot of bunk. The government can’t collect legal taxes from illegal money. ” - Al Capone.](https://reader035.fdocuments.in/reader035/viewer/2022062409/56649e545503460f94b4b07c/html5/thumbnails/20.jpg)
Citizens of YelselYou are a citizen of the country Yelsel and must come up with a tax structure. Your goal is to raise $2,000,000 - $5,000,000 through taxation. Then you must allocate the money to the programs listed on the handout. I will place you in groups based on your income, once in your groups you must…
1. Examine Yeslel’s population2. Create a tax structure that makes sense and seems fair.3. Agree on how to spend the money.4. Answer the questions.5. Create a chart that shows your tax system and indicate where the
money is going to be used.
As a class, we will vote on the best tax structure.
**Winning group gets 5 extra credit points!